Which of the following statements about output contracts is false?
A)Output contracts are generally illusory because they fail to specify a quantity of goods to be produced or purchased.
B)A party's quantity needs must be made in good faith.
C)A party's quantity needs cannot be unreasonably disproportionate to any normal prior output.
D)A party may not use an output contract to exploit the other party.

Question

Quizplus · Accepted Answer

Prior to the enactment of the UCC,many common law courts refused to enforce such agreements on the ground that their failure to specify the quantity of goods to be produced or purchased rendered them illusory.The courts also feared that a party to such an agreement might be tempted to exploit the other party.The Code addresses the concern about the potential for exploitation by limiting a party's demands to those quantity needs that occur in good faith and are not unreasonably disproportionate to any quantity estimate contained in the contract,or to any normal prior output or requirements if no estimate is stated [2-306(1)].

Which of the Following Statements About Output Contracts Is False